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Japanese Outfit Snaps Up ReplayTV

Patience appears to have literally paid off for D&M Holdings Inc.

After failing to forge a $40 million deal to buy SONICblue Inc.'s ReplayTV
digital-video-recorder and Rio MP3-player units earlier this month, the Japanese
electronics company snapped up those assets for $36.2 million in a bankruptcy
auction Tuesday.

D&M was the winning bidder in the auction in U.S. Bankruptcy Court in San
Jose, Calif. The transaction should close in about 10 days.

The corporation is the parent company of consumer electronics providers Denon
Ltd. and Marantz Japan Inc., which specialize in home theater, audio-video gear
and professional audio products.

In a press release, D&M stated that it intends to keep all existing
ReplayTV customers and will continue designing and distributing the ReplayTV and
Rio products. To do so, the company will set up a new subsidiary, Digital
Networks North America Inc., under its D&M Holdings U.S. Inc. operation.

"Both the ReplayTV personal video recorders and Rio portable compressed-audio
players are innovative products that have won numerous coveted industry awards,"
D&M president and CEO Tatsuo Kabumoto said.

"We will leverage the intellectual property and the excellent engineering
talent from the ReplayTV and Rio businesses across our D&M brands while
positioning these businesses to be more profitable," he added.

This isn't D&H's first foray into digital home entertainment. In 2002, it
made an investment in Mediabolic Inc., a San Francisco company that provides
embedded software for entertainment devices.